Labor burden: one standard rate for the year

Two people on the same wage rarely cost the same. One takes the health plan and the 401(k) and the other doesn't. One passes the Social Security wage base in the fall. If each job carried each person's own burden, a job would look better or worse depending on who was sent to it, and crews would end up being chosen to make a job's numbers look right.

So every job carries the same company rate on every wage. A job's labor cost is its hours at each person's wage (their own hourly wage when their file has one, otherwise their trade's on the job's rate table) plus the standard burden on that wage. A union scale table is the exception: it keeps its own fringe.

1. Start a plan.

   Select New plan. It starts from your active people and their wages, with 2,000 hours each and this year's federal figures filled in. If you've adopted a plan before, its rates carry over. Set when your fiscal year starts under The fiscal year starts in.

2. Say who the year's payroll is.

   Under People, change each person's wage and expected hours, and check who takes the health plan and the 401(k). Use Add a person for the people you expect to hire and Remove for those leaving. The wage bases only come out right person by person: someone well paid stops costing Social Security, FUTA and SUTA part-way through the year.

3. Fill in the pieces.
   • Paid time off: holidays and PTO a year in hours. It's paid but not worked, so the hours that are worked carry it.
   • Payroll taxes: Social Security, Medicare and FUTA are filled in. The state unemployment rate and wage base come from your state's notice.
   • Workers' comp and liability: each class's rate per $100 of payroll and your experience mod, from your policy. Give each person their class. Fill in liability only when your policy rates it on payroll.
   • Benefits: the company's share of health a month for each person enrolled, the 401(k) match, and anything else as a year's total.
   • Dollars an hour: anything charged by the hour rather than on wages.
4. Read the rate and save it.

   The rate is worked out as you type: each piece for the year, its share of the wages for hours worked, and what an average hour carries. Select Save draft. A draft can be opened again and changed, or deleted, until it's adopted.

On the plan's row, select Adopt, choose the day under In effect from (it starts at the beginning of the plan's fiscal year), and select Adopt plan. From that day job cost applies the plan's rate to every wage. Approved time already on the books from that day on is costed again at the new rate, and time before it keeps what it was costed at.

An adopted plan isn't changed afterwards, because time was costed at it. If something changes part-way through the year, like a workers' comp renewal or a new health plan, open the plan, select Copy into a new plan, change what moved, and adopt the copy from the day it changed.

Until any plan is adopted, job cost uses the burden on each labor rate table on the Directory's Employees tab.

After each pay period, bring your payroll service's register back from the pay run on Money › Send to payroll (see Send to payroll). Aggrado spreads what each person cost over the jobs and cost codes their hours went to and compares it with the standard cost those hours carried.

The difference goes on the Variance by pay period tab, not onto the jobs. Each period shows the job cost carried, what payroll paid, the variance and, when the register splits it out, payroll's gross, its burden and the burden as a share of the gross. Bringing the same period back again replaces it, and a wrong one can be reversed from Send to payroll › What payroll really cost.

Under The year against payroll, choose a fiscal year. You'll see what job cost carried at the standard, what payroll paid, the variance, and the burden payroll actually paid as a share of gross beside the plan's rate. Use it when you build next year's plan: copy this year's, change what moved, and adopt it from the first day of the new year.